- Stocks Fall After Selling Deluge in Germany. Stocks fell after Germany’s DAX Index (DAX) sank amid concern regulators in the European nation may impose more restrictions on short selling. The dollar, Treasuries and Bank of America Corp.’s shares rallied. The Standard & Poor’s 500 Index dropped 1.6 percent at 12:36 p.m. in New York. The Stoxx Europe 600 Index lost 1.2 percent after rising as much as 1.1 percent. The DAX plunged 4 percent in about 15 minutes before ending the day with a 1.7 percent retreat. Investors bet Germany would ban short selling, said Ryan Larson, head of U.S. equity trading at RBC Global Asset Management Inc. in Chicago. Germany’s Finance Ministry said the speculation was incorrect. After European markets closed, French, Italian and Spanish stock-market regulators decided to extend temporary bans on short selling introduced this month. U.S. equities slumped after American jobless claims increased.
- Jobless Claims in U.S. Rise to 417,000. Claims for U.S. unemployment benefits unexpectedly rose last week, pushed up for a second time by a labor dispute at Verizon Communications Inc. (VZ) Jobless claims climbed by 5,000 to 417,000 in the week ended Aug. 20, Labor Department figures showed today in Washington. Economists surveyed by Bloomberg News projected a drop in claims to 405,000, according to the median forecast. Today’s data showed the four-week moving average, a less- volatile measure than the weekly figures, increased to 407,500 last week from 403,500. The unemployment rate among people eligible for benefits fell to 2.9 percent in the week ended Aug. 13 from 3 percent, today’s report showed.
- Northeast Preps for Biggest Hurricane Threat Since 1985. New York, New Jersey and Delaware officials are preparing for the possibility of mass evacuations as Hurricane Irene threatens to wreak the most havoc in the Northeast since Hurricane Gloria in 1985.
- Volksbanken Won't Pay State Dividend, May Face Nationalization. Oesterreichische Volksbanken AG, the Austrian lender that failed last month's European stress test, may face nationalization after missing a dividend payment on state capital for the third time in as many years. "Due to the difficult economic situation and the implementation of the company strategy for 2015, a payment of dividends" for non-equity participation shares can't be met, Austria's fourth-biggest lender said in a statement today.
- CFTC May Adopt Final Speculation Limits as Early as Sept. 22. The U.S. Commodity Futures Trading Commission may vote as early as Sept. 22 to complete Dodd-Frank Act limits on speculative trading in commodities such as oil, natural gas and wheat, CFTC Chairman Gary Gensler said. The so-called position-limits rule and regulations governing derivatives clearinghouses may be voted on by commissioners next month, Gensler told reporters today during a CFTC economic research conference in Washington. The agency has a rulemaking meeting scheduled for Sept. 22. “I don’t know if it will be that meeting or early October,” Gensler said. “I feel very good about the progress staff has made.”
- Crude Oil Futures Advance in New York, Reversing Earlier Decline. Crude oil advanced in New York, rebounding from an earlier decline. Crude for October delivery gained 64 cents, or 0.8 percent, to $85.80 a barrel at 1:10 p.m. on the New York Mercantile Exchange. Brent oil for October settlement rose $1.03, or 0.9 percent, to $111.18 a barrel on the London-based ICE Futures Europe exchange.
- Buffett to Host Obama Fundraiser in New York. Billionaire Warren Buffett plans to hold a Sept. 30 fundraiser in New York City to benefit President Barack Obama’s re-election bid, according to two Democratic officials not authorized to speak publicly about the event.
- Citigroup(C), UBS(UBS) Cut Global Economic Growth Outlook as Jackson Hole Starts. Central bankers began arriving for their annual policy symposium in Jackson Hole as economists from Citigroup Inc. to UBS AG cut forecasts for global growth and predicted interest rates will stay on hold until at least 2013. Citigroup said the world economy will grow 3.8 percent this year and 4 percent in 2012 in purchasing power parity terms, down from 4.2 percent and 4.4 percent. UBS cut its estimate for expansion next year to 3.3 percent from 3.8 percent and Societe Generale SA pared its forecast to 3.9 percent from 4.6 percent.
- Greek Default Fears Rise. Euro-zone policy makers appeared nowhere near settling a dispute Thursday over Finland's collateral demands in exchange for participating in a €109 billion ($157.1 million) bailout for Greece, raising concerns the Mediterranean nation may default. Markets have grown more worried about the potential for a Greek debt default amid a lack of progress in resolving the collateral issue this week, according to a person familiar with the situation. Finland, meanwhile, shows no sign of backing down. Yields on Greek two-year bonds rocketed to a record of over 43% Thursday, according to Tradeweb, and the cost of insuring Greek government bonds against default also rose sharply. Greek five-year sovereign credit-default swaps were 1.37 percentage points wider at 22.75 percentage points, according to Markit. Euro-zone governments are looking into alternative forms of collateral after a cash deal reached earlier between Greece and Finland was rejected by key member countries, including Germany and the Netherlands. The collateral dispute, if not resolved soon, could derail a second bailout package for Greece agreed by euro-zone leaders on July 21. Without support from all 17 euro-zone countries, no funds can be released, while changes to the European Financial Stability Facility, the currency bloc's bailout fund, can't go forward either. "It seems that a possible outcome is either collateral for all member states or no country will get it," said another person, who remains hopeful a solution can be found by the end of Friday. Finland said Thursday that it continues discussions with Greece and other euro-zone countries to find a solution. Officials refrained from further comment. "The issue has become so politicized that no one here at the Finance Ministry wants to talk about it at the moment," said Anita Sihvola, spokeswoman for the Finnish finance ministry. On Wednesday, Finance Minister Jutta Urpilainen reiterated that Finland won't take part in the Greek bailout unless it obtains collateral.
- Roundup: Here's What Everyone Expects From Bernanke At Jackson Hole.
- Spain, Italy, France, Greece and Belgium Extend Bans On Short Selling.
- China Quietly Admits to $470 Billion In Its Underground Banking System.
- Greece Quietly Activates Emergency Liquidity Measures.
- China Swoops In To Claim Lucrative Libyan Infrastructure Deals.
- "A Wolf In Sheep's Clothing". This really bothers me. You have to love that Warren Buffett, the richest man in the world, has deemed himself representative and ambassador for those making $250,000 and more..."People like myself" he says. People that take home $250,000 a year before taxes are somehow in the same category as the richest man in the world?
- Obama's Latest Stimulus: Handing Out Jobless Benefits To Striking Workers.
- Irene Is Now Expected To Pass Right Over Wall Street With 74-95 mph Winds. (pic)
- Bank of America(BAC), Buffett Deal Stinks: Bove. Bank of America(BAC_)'s $5 billion preferred equity investment from Warren Buffett's Berkshire Hathaway(BRK.A_) is "a terrible, terrible deal," according to Rochdale Securities analyst Dick Bove.
- Buffett's Deal With Bank of America(BAC) Is Absolutely Terrible... for Bank of America (BAC) that is. For Warren Buffett, this is easily one of the most ruthless, aggressive, and ultimately profitable deals he's struck on behalf of Berkshire Hathaway (BRK.A, BRK.B) since the financial crisis began. Buffett always laments the difficulty in finding good investment opportunities when you're running a company the size of Berkshire, but as this deal shows, sometimes it pays to be a fat cat that can toss around $5 billion at a moment's notice. To demonstrate just how ridiculously good this deal is for Berkshire, let's compare it to another one of Buffet's famous bailouts that has paid off handsomely for his company: his investment in Goldman Sachs (GS).
- Pimco CEO: Bernanke Must Avoid 'QE3' In Friday Speech - FT. The head of bond-fund giant Pimco says Federal Reserve Chairman Ben Bernanke should avoid any suggestion the U.S. central bank intends to pursue new purchases of Treasury Bonds and instead use a much-anticipated Friday speech to press for economic reforms. Mohamed El-Erian, in an opinion essay published Thursday on the Financial Times' website, wrote that Bernanke would likely encounter little political support for extending the Fed's policy of "quantitative easing," dubbed "QE3." Moreover, "expectations are far ahead of what he can reasonably deliver in terms of economic outcomes," El-Erian added. The chief executive of Pacific Investment Management Co. said Bernanke's speech Friday at a Fed event in Wyoming could best be used as a forum from which to launch fresh efforts to fix the struggling U.S. economy." Rather than embark on another policy initiative ('QE3') with questionable net benefits, it would be better for Mr. Bernanke to use his Jackson Hole speech to reframe the national policy debate and, in the process, set the stage for President Barack Obama's key economic announcements on September 5. "The time has come for the American policy narrative to be much more explicit about the structural challenges facing the country and, critically, set the stage for proposing to Congress a comprehensive package of self-reinforcing reforms. Mr. Bernanke can facilitate this by using his Jackson Hole remarks as the warm-up act for Mr. Obama's critical speech on the economy next month. Anything beyond this would run the risk of the Fed building another costly bridge to nowhere."
- Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Thursday shows that 21% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as president. Forty-five percent (45%) Strongly Disapprove, giving Obama a Presidential Approval Index rating of -24 (see trends).
- Finland's agreement with Greece on collateral to cover its bailout contribution won't be accepted by other euro region member-states, citing people familiar with the matter. The agreement is "off the table," German Finance Minister Wolfgang Schaeuble said at a meeting of the parliamentary groups of the Christian Democratic Union and its Christian Social Union sister party, according to people who attended.
- Spain's government plans to reintroduce a wealth tax scrapped in 2008, and increase the minimum threshold at which the levy applies to 1.5 million euros. The Cabinet plans to adopt the measure at its meeting tomorrow.
- European banks are more vulnerable to the debt crisis than their U.S. counterparts because their capital levels are smaller, citing PIMCO's Mohamed El-Erian. Europe's banks didn't raise capital during the relative calm of 2010, and the region's lenders also carry higher debt and lower deposits in the euro area's "peripheral" countries, he said in an interview. The ECB has been contaminated by increasing amounts of the debt of the region's troubled countries and has now become an inherent part of the euro zone's problems, he said. The solution to Europe's debt crisis may mean choosing between saving the problem countries on the euro zone's periphery and preserving its solid core, he said.
- China will continue macro-control policies on the property sector "without changing the direction or loosening the policies," Zhang Ping, head of the National Development and Reform Commission, was cited as saying.
- China's head of the National Development and Reform Commission Zhang Ping said it will be "difficult to keep the consumer price index growth below the government's target this year."
- Inflationary expectations in China may continue to grow and prices are likely to remain high, making price-control targets harder to achieve, citing a government official. "Global liquidity will remain abundant in the short term and imported inflationary pressure has not eased by much," said Zhang Ping, head of the National Development and Reform Commission, China's top economic planner, in a report to the National People's Congress.
- China will strictly control the size of local government debt, citing Chinese Finance Minister Xie Xuren.